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Challenges in Aerospace IT: The CIO
Perspective
Jayakanth “JK” Srinivasan Lean Aerospace Initiative
Massachusetts Institute of Technology April 18, 2007
Agenda
• Motivation
• Research Methodology
• Key Findings
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Motivation
Industry
• Aerospace and Defense (A&D) IT budgets for
2007 will consume an estimated 6.1% of total revenue
Source: AMR Research, Aerospace and Defense Budget and Outlook for 2007, December 2006
• 40 – 60% of ERP projects fail
Source: G. Langenwalter, Enterprise Resources Planning and Beyond:
Integrating Your Entire Organization, St. Lucie Press, Boca Raton, FL, 2000.
Government
• DOD systems overly
complex and error-prone
– little standardization across the department
– multiple systems
performing the same tasks – same data stored in
multiple systems
– need for data to be entered manually into multiple
systems Source: GAO 06-658
• Fiscal 2007 – DOD request - $16 billion
Source: GAO 07-451
© 2007, Massachusetts Institute of Technology, [email protected]
How do we design, implement and sustain IT
systems to enable lean enterprise
transformation?
More importantly
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Preliminary Interviews
• 12 questions partitioned into 2 broad areas
• Understanding the organization • Understanding the execution • Understanding the organization
– IT enables both efficiency and effectiveness, but is not yet a “driver” of strategy – Change management is
key to successful IT
systems implementation
• Understanding the Execution
– Project delivery is key
– Getting customer buy-in is about relationships
management
– Projects will slip, but team members have to keep customers informed – Project nature
• Cowboy projects • Long term projects
– Funding control is critical
Aligning IT Strategy to Enterprise
Strategy
• “We are currently undergoing a paradigm/culture shift , where we are going to a space in which we haven’t
played before … We are now expected to add value – internal to the organization as well as on the customer side” – Industry CIO
• “Our strategy has not changed a lick in the last three years” – Government CIO
• “It is very very important for the analysts in the world to give numbers – so leaders can apply intuition to the
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Successful Execution Matters!
• Benefits
– Once we delivered the first module, then all of a
sudden it went from - “this is never going to happen” to “Oh! Oh! this is going to happen and we many need to get involved”
– We are “fighting” with the customer on a daily basis to say this is what the systems does, work with it.. Our customers are like fighter pilots – they want it done their way – we are still listening to comments like “the screen doesn’t look the way it used to” and “I don’t do it that way”
Enabling Successful Execution
• Getting customer buy-in
– I knew the leader drove a BMW- so I said, ‘can you imagine going to a BMW dealer, and saying I don’t like where the speedometer and I want it moved. You are asking us to take a COTS product, and in
essence asking us to move the speedometer’
• Building an effective implementation team
– “I have taught my team that I can take bad news, I just need it early”
– “If the project has not delivered its capability within six months to a year, I pull the plug”
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CIO Roundtable
• 3 discussion sessions
– Strategy, People, Change Mangement
• 6 key challenges
– Aligning IT to enterprise strategy
– Identifying and articulating the business value of IT – Managing change after IT systems implementation – Enabling lean initiatives through the use of IT
– Managing and leveraging the Gen-X talent base
– Using IT to enable knowledge management within the enterprise
Articulating Business Value of IT
• “It is wrong headed to ask me about the business
value of IT – The role of IT is to provide trusted information to the
customer to enable quick decision making”
-Industry CIO • The benefits of IT systems are often “unintentional”
• Large amounts of cost data, but there is no true understanding of actual system costs
• Traditional metrics
– Cost per employee
– # of application systems
• Heuristics
– Seamless information flow – Connecting people
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